Caravel faces stiff opposition from local shipowners

Caravel faces stiff opposition from local shipowners

Bangalore: Chennai-based Caravel Logistics Pvt. Ltd, which started a shipping service earlier this month to carry container cargo between Indian ports, is facing stiff opposition from local shipowners in its bid to continue running the service beyond November.

Caravel has hired a Dutch container ship to run the service with the approval of the Director General of Shipping (DGS), India’s maritime regulator. However, the six-month permission to run the foreign-registered ship lapses in October.

Caravel last week applied for a so-called no-objection certificate (NOC) from the Indian National Shipowners’ Association (Insa), an industry body, to hire the Dutch ship for a further period or another foreign ship to continue the service.

The regulator allows firms to hire foreign ships to operate along the country’s coast only if Insa issues an NOC, assuring that an Indian ship of the capacity and specification required by the cargo owner is not available for work. Coastal trade is reserved for Indian-registered ships and foreign ships can be hired to carry cargo only when Indian ships are not available.

The system was designed to protect local shipowners from foreign competition in Indian waters.

In Caravel’s case, coastal ship operators such as state-run Shipping Corp. of India Ltd (SCI), Shreyas Shipping and Logistics Ltd and Seaways Shipping Ltd are opposed to Insa granting an NOC.

“The NOC cannot be granted as enough Indian ships are operating on the sector which are under utilized," said Capt. V.K. Singh, an executive at Shreyas Shipping.

Indian shipowners are operating on the coast with much difficulties, said Capt. K.P. Rajagopal, an executive at Transcoastal Cargo and Shipping Ltd. Allowing Caravel to hire a foreign ship would be a blow to all Indian shipowners operating on the coast, he said.

“There is already surplus shipping capacity available with coastal ship operators and if Caravel needs any space/slots to carry their containers on our ships, then they can approach any of the existing operators to meet their requirement," said Capt. A. Chopra, senior vice-president, container services and marketing at Shipping Corp.

“This is utter nonsense," said Caravel’s managing director Saju Chacko. “They expect me to transport the container cargo that I have generated from customers by hard work on their ships. There is no way this will be done."

He added: “I will buy my own ship soon but ahead of that we want to learn the tricks of the trade. That’s why I want to hire a ship."

Caravel faced similar hurdles last year ahead of its plans to launch a shipping service. It was granted an NOC by Insa last June, but this was withdrawn after Shreyas Shipping said it had a ship meeting Caravel’s requirements.

Caravel had said the price quoted by Shreyas for hiring out the ship was unacceptable as it was higher than the market rate.

Faced with a court case, Insa finally relented and granted an NOC to Caravel in April, clearing the way for the regulator’s permission to hire the foreign ship.

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